Joshua and Mary Sullivan Purchased a New Home on October

question 44

Essay

Joshua and Mary Sullivan purchased a new home on October 1 of year 1 for $400,000. At the time of the purchase, it was estimated that the real property tax rate for the year would be 1 percent of the property's value. Because the taxing jurisdiction collects taxes on a July 1 year-end, it was estimated that the Sullivans would be required to pay $3,000 in property taxes for the property tax year relating to October through June of year 2 ($400,000 × 1% × 9/12). The seller would be required to pay the $1,000 for July through September of year 1. Along with their monthly payment of principal and interest, the Sullivans paid $333 a month to the mortgage company to cover the property taxes. The mortgage company placed the money in escrow and used the escrow funds to pay the $3,000 property tax bill in July of year 2. The Sullivans' itemized deductions exceed the standard deduction before considering property taxes. What amount are the Sullivans allowed to deduct for property taxes relating to the property in year 1 (ending July 1, year 1)and year 2 (ending July 1, year 2)?

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Definitions:

Genetic Loci

Specific locations or positions on a chromosome where a gene or genetic marker is situated.

Alleles

Different forms of the same gene, found at the same locus on a chromosome, which vary in their nucleotide sequence and can influence the trait they control in different ways.

Beneficial Allele

A beneficial allele is a variant form of a gene that gives an organism a higher probability of survival or reproduction in a specific environment.

Allele Frequency

The relative frequency of an allele (variant of a gene) at a particular locus in a population, expressed as a fraction or percentage.